Reality Check: How Many Jobs Will The Democrats' Public Works Bill Create?
MINNEAPOLIS (WCCO) --The plan by state Senate Democrats to pass a $1.5 billion public works bill is in limbo Friday, after Republicans refused to provide the votes to pass it.
Democratic leaders say the measure could generate 40,000 jobs.
The $1.5 billion would be spent on hundreds of projects like road and bridge repair.
Wastewater treatment plants.
New buildings at colleges and universities.
So, here's the claim.
All of that money will generate tens of thousands of jobs.
"We're trying to provide jobs all over the state. I think that's very important," said Sen. Bev Scalze, DFL-Little Canada, who's Vice Chair of the Capital Investment Committee. "We're looking at 39,900 jobs all over the state."
That's a lot of jobs.
In fact, it's more jobs than the billion dollar Vikings stadium generated: 7,500.
It's more jobs than every business in the entire state of Minnesota created in the last year: 35,940.
Democrats say they're using a jobs multiplier formula developed by Dr. Stephen Fuller, the director of the Center for Regional Analysis at George Mason University.
Here's what they said in a press release about their jobs estimate:
"According to the investment calculations given to congress in 2009 by Dr. Stephen Fuller, Director of the Center for Regional Analysis at George Mason University, based off of the impact of $1 billion in nonresidential construction when there are sufficient unused labor, capital and materials."
WCCO contacted Fuller, who told us the actual job multiplier numbers in 2016 and beyond are much lower.
Dr. Fuller says Democrats are using an old formula from 2007.
Before the stock market crashed.
Before the housing bubble burst.
Before the Great Recession.
"The multipliers available in 2009 were based on 2007 data. Today, the multiplier is lower," Fuller told WCCO in an e-mail. "And, you should be using the Minnesota multiplier and not the US. The current jobs construction multiplier for MN is 15.3 jobs per $1 million in construction outlay for all types of construction. Back in 2009 it would have been 21.6 jobs per million. Construction, like all sectors, has become less labor intensive and more efficient since the recession (technology, off-site manufacturing of materials, precast for example, and also globalization of the industry) has reduced the labor component."
So: The Democratic claim of 39,900 jobs is outdated, and inflated.
Based on the Fuller Formula, it's closer to 22,900.
And even that number is likely high, depending on the project and the labor supply.
That's Reality Check.
Here are some of the sources that we used for this Reality Check:
http://mn.gov/deed/newscenter/publications/trends/june-2014/construction-sector.jsp
http://mn.gov/deed/newscenter/press-releases/newsdetail.jsp?id=466-180151
https://www.youtube.com/watch?v=Rih9qONXYsY&feature=youtu.be